Public Works is set to announce, as early as next week,the purchase of the Nortel Networks campus in west Ottawa for the Department of National Defence, which has wanted for years to consolidate its dozens of offices in the city into several key locations.
The successful purchase of the $150-million Nortel campus will accomplish that goal, government sources say.
DND has been concerned about security, rising rents and aging buildings. The consolidation will also cut costs.
The deal could be announced as early as Monday, but there is concern, however, about how DND employees, many of whom live in Orléans — which some jokingly refer to as CFB Orléans — will take the news.
DND offices are situated in almost 40 locations across the National Capital Region and the move is expected to bring many of those under one roof. The department will continue to operate National Defence headquarters in downtown Ottawa.
Public Works officials said they couldn’t respond to a Citizen request for comment until sometime on Monday or after.
But the head of the Defence Department’s largest union said he had already heard about the department’s move to the Nortel facility, although his organization hasn’t been consulted.
John MacLennan, national president of the Union of National Defence Employees, said his organization is concerned about transportation problems for workers.
“This means Canadian Forces Base Orléans will have to go to work in Kanata,” MacLennan said. “You’re adding on extra time to get to work, from one end of the city to the other and transit services aren’t the best. It’s going to be a challenge for a lot of people.”
MacLennan said the department has more than 9,000 employees in the capital region.
There are already indications that the move for DND offices is being planned.
On Thursday, a top Public Works and Government Services Canada official confirmed that the federal government plans to empty one million square feet of office space in downtown Ottawa.
Claude Séguin, the director general of portfolio management for Public Works and Government Services, told a commercial real-estate conference that the government will leave Centretown office space, equal to 10 per cent of current federal space and about the size of L’Esplanade Laurier, over the next three to five years.
When asked about the Nortel property, Séguin responded: “We have been engaged in the bidding process and at this time it would be premature to say more. There is no agreement in place and we will have no further comment.”
Five years ago, the Defence Department had plans to vacate its various offices downtown and consolidate those into several central existing locations, including in the Louis St.-Laurent Building in Gatineau and in an office complex on Star Top Road. The third main site would have been the JDS Uniphase complex on Merivale Road.
DND eventually had to scrape the acquisition of the JDS complex and the RCMP moved into the campus.
The negotiations to sell the Nortel campus have been underway since the spring. Bidding by private- and public-sector contenders is believed to have gone through two rounds.
Nortel is believed to be seeking $150 million, a price that some think is high.
The federal government has always been seen as the most logical candidate for the 1.7 million square feet of office space. But the government was expected to sign a long-term lease and let private-sector managers and investors provide the financing to buy, renovate and manage the property.
Minto Developments led this approach when it bought the former JDS Uniphase campus for lease to the RCMP.
But Séguin said “we are not contemplating leasing” (the Nortel campus) because of “specific government needs.”
Some experts think the government may be trying to buy the Nortel campus at depressed bankruptcy prices, an approach that worked with some other Nortel properties that it now occupies.
With files from Bert Hill
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